Post Retirement Employment Restrictions:
The New Jersey State PBA has received the latest fact sheet regarding post retirement employment restrictions. Fact sheet 86 (August 2015) does a good job informing our members of the many restrictions that pertain to post retirement employment. The pension benefits that our members receive are governed by New Jersey Statutes as well as the Internal Revenue Code. Our pensions are considered a qualified governmental defined benefit plan in accordance with Internal Revenue Code sections 401(a) and 414(d). In order for the State of New Jersey to keep the qualified status and to protect retirees from a 10% early distribution tax penalty on monthly pensions, the Division of Pensions was required to adopt and enforce the regulations and compliance with the IRC requirements.
The Fact Sheet has confirmed what we have been advising our members; if you return to work with the same employer in any capacity, the member would need to have a bona fide separation of service of 180 days. The Division of Pensions has done a good job explaining and using examples of what members of the pension system can and can not do. They also clearly inform our members of the penalties that we are subject to should our members violate the IRC/Pension restrictions.
This is the most frequently asked question we get at the NJSPBA office, so take a few moments to familiarize yourself with this fact sheet. As always, if you have questions regarding this fact sheet please call or email me at the New Jersey State PBA Office.
NJSPBA Pension Consultant
Click Here for Fact Sheet #86